As 2015 came to a close, nonprofits were cheering a major legislative victory: Congress made permanent a tax law allowing people to more easily send money from their retirement accounts to charity, and it extended the incentives for making donations of food and of land that deserves environmental protection.
For a long time, nonprofits have been fighting at the end of every year to persuade Congress to pass these provisions — and then they’ve had to do it all over again.
I had a front-row seat onto all that lobbying when I served as chairman of the board of the Council on Foundations, and I applaud all the work that advocates have done to pull off that accomplishment. But as I stepped aside from that job (and as board member of the council) and have had time to reflect on what it takes to help nonprofits serve society better, I realize that what we’ve been doing is much too small.
Instead of focusing on narrow tax incentives, it’s time for charities and foundations to set national goals for increasing the amount that Americans give to nonprofit organizations.
For as long as records have been kept, charitable giving has remained stuck at about 2 percent of the gross domestic product. There may be a lot of reasons that we’ve never grown that number, but one surely is that we’ve never set a bigger national goal.
As we open a year of presidential elections — and much deliberation about the state of the country — it’s the right time for nonprofits to decide we will work together to increase charitable giving to at least 3 percent of our gross domestic product in the next three years.
Think about what goals do.
America built a space program in 10 years that landed astronauts on the moon.
We’ve led the world in eliminating polio and restoring our wildlands and saving endangered species. But those things happened only because we set goals.
Nonprofits should recognize that the year ahead could offer a once-in-a-lifetime opportunity. We are drifting toward the first major tax overhaul in 30 years, likely to come in 2017. The political conversation leading up to that work — and the Congressional and presidential elections coming in November — will start in earnest this month. So let’s focus that conversation on charitable giving.
Could we bring together the Council on Foundations, Independent Sector, Leadership 18, the National Assembly of Human Services, and other advocacy groups not to talk about defending minor tax provisions but to talk about expanding overall giving?
In today’s dollars, an increase in giving to 3 percent would yield an additional $170 billion to expand the work of the nonprofit sector. The impact on our communities would be staggering.
Setting a national goal of channeling at least 3 percent of GDP to charitable giving will require a bold marketing strategy. But nonprofits — which have already convinced the country to reduce cigarette smoking by more than 50 percent over five decades — are certainly capable of deploying bold marketing strategies. We’ll need to explain, in far better terms than we ever have, the impact that charitable giving has in the life of our country.
Our institutions will need to look hard at their own internal operations. We’ll need to explore whether we’re making the case to donors for the value of our work in a way that resonates with them. We’ll need to ask ourselves why the professionaliziion of development hasn’t yielded much in the way of results, and how we, as organizations, can better reach new constituencies.
A national goal for more charitable giving will require an aggressive set of policy ideas. We should allow everybody who files a tax return, not just those who itemize their taxes, to get a tax break for their giving.
We should advocate for removing limits on the charitable deduction that prevent wealthy Americans from getting a benefit when they donate a large percentage of their income every year. Nobody should have to pay taxes on money they donate to societal good. We need to expand the time that donors can make a gift; that is, allow them until April 15 of each year to make donations that count in the previous tax year.
As a country, we’ll have to agree to the basic premise that we want to encourage charitable giving because it supports the most important work we do in this country.
We have an opportunity, and perhaps an obligation to posterity, to shape a new national debate about the power of charitable giving in our nation. We owe it to those we serve to ignite that debate.
Kevin K. Murphy is president of the Berks County Community Foundation. He is immediate past chair of the board of directors of the Council on Foundations.
